UPS doesn't deliver on profit estimates

United Parcel Service says weak global trade and a disappointing holiday-shopping season slowed it down in the fourth quarter.

Profit in the last three months of 2012 fell short of Wall Street expectations. So did UPS' outlook for this year as the company took a cautious approach toward the global economy.

UPS also forecast a “relatively flat” first quarter.

“Overall we still see 2013 as a slow-growth economy,” Chairman and CEO D. Scott Davis said Thursday on a conference call with analysts.

Davis said Europe was more stable than a year ago, and “in the U.S., I think we got off to a strong start in January.” But, he added, “We're not banking on a robust economy.”

The company predicted that economic growth in 2013 would be 2 percent for the U.S. and 2.5 percent worldwide.

UPS is the world's biggest package-delivery company and something of an economic bellwether. It operates fleets of trucks and planes that haul everything from trinkets to industrial equipment between companies and from businesses to consumers.

The Atlanta-based company said it expects 2013 adjusted earnings of between $4.80 and $5.06 per share. That would be an increase of 6 percent to 12 percent over 2012, but less than the $5.13 per share that analysts expected. UPS said the first quarter would be fairly flat, hurt by one less business day than in 2012.

UPS said it lost $1.75 billion in the fourth quarter because of a $3 billion charge for pension liabilities, compared with a profit of $725 million a year earlier. Without the pension-accounting charge, UPS said that it would have earned $2.05 billion, or $1.32 per share.

Analysts expected adjusted earnings of $1.38 per share, according to FactSet.

UPS said consumer spending on holiday shopping was less than expected, although it still carried a record 500 million packages, including nearly 28 million on the busiest day, Dec. 19.

In January, UPS walked away from an agreement to buy TNT. It would have expanded UPS' presence in Europe, but antitrust regulators there insisted on concessions that UPS considered too costly. Davis said Thursday that the company is still interested in acquisitions but probably nothing as big as TNT, which would have been UPS' largest purchase ever.